Finality of refund entitlement bars protective recovery notice after an unchallenged Tribunal order in the assessee's favour.

A protective show cause notice for recovery of refund cannot survive where the refund entitlement was already finally decided in the assessee's favour by an earlier Tribunal order that the Revenue did not challenge. Once the refund claim attained finality and the refund was sanctioned in compliance with that order, the Revenue could not reopen the matter or seek recovery of the same amount through a subsequent notice. The later notice was contrary to the binding effect of the prior decision and was held ab initio illegal and unsustainable; the impugned order was set aside in favour of the assessee.

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Issues: Whether the protective show cause notice for recovery of refund was sustainable after the refund issue had attained finality in the assessee's favour by an earlier Tribunal order that was not challenged by the Revenue.

Analysis: The refund had been sanctioned only in compliance with the Tribunal's earlier order, which had finally decided the refund claim in favour of the assessee. As the Revenue had not carried that order further, the entitlement to refund attained finality. Once that position stood concluded, the Revenue could neither deny the refund nor initiate recovery of the same amount through a protective notice. The later show cause notice was issued contrary to the binding effect of the prior Tribunal decision and was therefore without authority.

Conclusion: The protective show cause notice was held to be ab initio illegal and unsustainable, and the impugned order was set aside in favour of the assessee.

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